{"id":37307,"date":"2025-08-27T11:56:45","date_gmt":"2025-08-27T15:56:45","guid":{"rendered":"https:\/\/www.millerthomson.com\/?p=37307"},"modified":"2025-09-19T15:32:47","modified_gmt":"2025-09-19T19:32:47","slug":"alberta-employer-ordered-to-pay-26-months-termination-pay-in-exceptional-wrongful-dismissal-case","status":"publish","type":"post","link":"https:\/\/www.millerthomson.com\/en\/insights\/labour-and-employment\/alberta-employer-ordered-to-pay-26-months-termination-pay-in-exceptional-wrongful-dismissal-case\/","title":{"rendered":"Alberta employer ordered to pay 26 months\u2019 termination pay in exceptional wrongful dismissal case"},"content":{"rendered":"\n<p>For the first time in Alberta, a court has awarded more than 24 months\u2019 reasonable notice in a wrongful dismissal case. In <a href=\"https:\/\/www.canlii.org\/en\/ab\/abkb\/doc\/2025\/2025abkb460\/2025abkb460.html\"><em>Lischuk v K-Jay Electric Ltd<\/em>.<\/a> (\u201c<strong><em>Lischuk<\/em><\/strong>\u201d), the Alberta Court of King\u2019s Bench ordered an employer (the \u201c<strong>Company<\/strong>\u201d) to pay an employee with 34 years of service, and significant minority shareholder (the \u201c<strong>Plaintiff<\/strong>\u201d), 26 months termination pay.<\/p>\n\n\n\n<p>The decision marks a significant departure from the province\u2019s long-standing, unofficial 24-month cap. In addition to breaking the reasonable notice ceiling, the Court addressed key employment law issues including entitlement to vacation pay, the appropriate length of the reasonable notice period, mitigation of damages, entitlement to bonuses during the notice period, and whether the Plaintiff could recover for increased share value during the reasonable notice period under a Unanimous Shareholders Agreement (\u201c<strong>USA<\/strong>\u201d).<\/p>\n\n\n\n<p>The Court ultimately awarded the Plaintiff more than $1.52 million in damages.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Case background: How an Alberta wrongful dismissal led to record-termination pay <\/h2>\n\n\n\n<p>The Plaintiff devoted almost his entire working life to the Company, an Edmonton-based residential and commercial electrical contractor. Starting in 1978 at age 23, he first worked as a labourer and rose through the ranks, obtaining his journeyman and master electrician certifications. In 2008, he was promoted to General Manager, overseeing day-to-day operations while the company founder retained control over corporate finances and strategic direction.<\/p>\n\n\n\n<p>In 2002, through a holding company, the Plaintiff became the first employee-shareholder of the Company, eventually acquiring a 20.1% ownership stake. Over the years, other employees also acquired shares, but the Company remained closely held, with the founder\u2019s family retaining significant ownership.<\/p>\n\n\n\n<p>In November 2013, when the Plaintiff was 58 years old, the Company terminated his employment without cause. The termination triggered a mandatory share buyback under the USA, resulting in the sale of the Plaintiff\u2019s shares back to the Company. Disputes arose, including, but not limited to the following:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Unpaid vacation pay;<\/li>\n\n\n\n<li>The length of the reasonable notice period;<\/li>\n\n\n\n<li>Failure to mitigate damages; and<\/li>\n\n\n\n<li>Entitlement to bonuses during the notice period.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">First in Alberta: Reasonable notice beyond 24 months<\/h2>\n\n\n\n<p>Traditionally, Alberta courts have described 24 months as a \u201crough upper limit\u201d for reasonable notice. While Ontario courts have recognized awards beyond 24 months in \u201cexceptional circumstances,\u201d no Alberta decision had done so until now.<\/p>\n\n\n\n<p>In its analysis of the reasonable notice period, the Court considered the principles established in <a><\/a><a href=\"https:\/\/www.canlii.org\/en\/on\/onsc\/doc\/1960\/1960canlii294\/1960canlii294.html?resultId=d24cc70c6ae24183ab64b04501e19af5&amp;searchId=2025-08-12T14:34:55:948\/d5755abd1b3b4ef69a06e3414178614d&amp;searchUrlHash=AAAAAQAbQmFyZGFsIHYgR2xvYmUgJiBNYWlsIEx0ZC4gAAAAAAE\"><em>Bardal v. Globe &amp; Mail Ltd<\/em>.<\/a> (\u201c<strong><em>Bardal<\/em><\/strong>\u201d), which include the character of the employment, the length of service, the employee\u2019s age, and the availability of comparable employment in the market, given their experience, training, and qualifications.<a href=\"#_ftn1\" id=\"_ftnref1\">[1]<\/a> Additionally, the Court recognized historical and recent cases concerning reasonable notice period limits, which have increased incrementally, but do not provide \u201ca particular maximum.\u201d<a href=\"#_ftn2\" id=\"_ftnref2\">[2]<\/a><\/p>\n\n\n\n<p>While Alberta courts have considered whether plaintiffs have had special circumstances to exceed a reasonable notice period of 24 months, they had not yet found that a plaintiff had met said circumstances.<a href=\"#_ftn3\" id=\"_ftnref3\">[3]<\/a> The Court referenced the Ontario Court of Appeal\u2019s stance that \u201cthere is no absolute upper limit on reasonable notice,\u201d and cited cases from Ontario and British Columbia where exceptional circumstances were established.<a href=\"#_ftn4\" id=\"_ftnref4\">[4]<\/a><\/p>\n\n\n\n<p>Justice Angotti found that none of the cases before her stated a hard cap of 24 months and that exceptional circumstances typically exist where an individual begins with a company as a young adult and is terminated near retirement age after becoming a prominent or highly specialized employee.<a href=\"#_ftn5\" id=\"_ftnref5\">[5]<\/a> The Court held that the Plaintiff met the threshold for exceptional circumstances based on the following factors:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>34 years of continuous service with a single employer;<\/li>\n\n\n\n<li>58 years old at termination, with limited transferable skills outside the electrical industry;<\/li>\n\n\n\n<li>Termination amounting to a forced retirement, despite no intentions to retire; and<\/li>\n\n\n\n<li>A high-level role as a key employee and shareholder in a successful, closely held, business.<\/li>\n<\/ul>\n\n\n\n<p>Considering these factors holistically under the <em>Bardal<\/em> analysis, the Court held that a 26-month notice period was warranted, breaking Alberta\u2019s previous unofficial ceiling.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Vacation pay entitlement upon termination in Alberta<\/h2>\n\n\n\n<p>The Court found that the Company owed the Plaintiff six weeks of unused vacation pay for 2013, worth $20,320. The Court noted that there was an absence of a written vacation policy or adequate tracking records. The Plaintiff met his onus to establish that he had earned eight weeks\u2019 vacation but took only two.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Failure to prove job availability defeats mitigation of damages defence<\/h2>\n\n\n\n<p>Although the Plaintiff made no effort to seek alternative employment, the Court held that the Company failed to prove that suitable jobs were available. The onus to establish a failure to mitigate rests with the employer, requiring evidence of comparable opportunities. In the absence of such evidence, the mitigation defence was dismissed.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Termination does not eliminate bonus entitlement during notice period<\/h2>\n\n\n\n<p>The Court applied the Supreme Court of Canada\u2019s two-part test in <a><\/a><a href=\"https:\/\/www.canlii.org\/en\/ca\/scc\/doc\/2020\/2020scc26\/2020scc26.html\"><em>Matthews v. Ocean Nutrition Canada Ltd<\/em>.<\/a> to determine whether reasonable notice includes bonus payments. The test looks at:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>But for the termination, would the employee have been entitled to the bonus during the reasonable notice period?<\/li>\n\n\n\n<li>If so, do the terms of the employment contract or bonus plan unambiguously take away or limit that common law right?<a id=\"_ftnref6\" href=\"#_ftn6\">[6]<\/a><\/li>\n<\/ol>\n\n\n\n<p>The Court found that if not for his termination, the Plaintiff would have remained a shareholder and therefore been entitled to his bonus payments, which were paid to him, not his holding company.<a href=\"#_ftn7\" id=\"_ftnref7\">[7]<\/a> As well, the USA did not unambiguously limit the Plaintiff\u2019s right to bonuses during the reasonable notice period.<a href=\"#_ftn8\" id=\"_ftnref8\">[8]<\/a><\/p>\n\n\n\n<p>Therefore, the Court awarded the Plaintiff $948,626 in bonus damages, calculated using a mixture of the future and historical calculation method that accounted for both historical averages and post-termination changes to the Company\u2019s bonus structure.<a href=\"#_ftn9\" id=\"_ftnref9\">[9]<\/a> Additionally, adjustments were made for the Company\u2019s financial practices, including the allocation of severance liability and disproportionate payments to other shareholders.<a href=\"#_ftn10\" id=\"_ftnref10\">[10]<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Alberta wrongful dismissal case results in $1.52 million total award<\/h2>\n\n\n\n<p>The Court ultimately awarded the Plaintiff $1,522,841.33 in damages, comprising:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>$20,320 in vacation pay;<\/li>\n\n\n\n<li>$553,895.33 for base salary, benefits, and Christmas bonus during the 26-month notice period; and<\/li>\n\n\n\n<li>$948,626 in bonus damages.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Key takeaways<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">1. Reminder: 24 months is not absolute<\/h3>\n\n\n\n<p>Historically, Alberta courts have treated 24 months as the \u201crough upper limit\u201d for reasonable notice in wrongful dismissal cases. However, <em>Lischuk<\/em> signals that our courts may follow Ontario\u2019s lead and be willing to find exceptional cases that warrant beyond 24 months\u2019 reasonable notice.<\/p>\n\n\n\n<p>This case serves as a reminder that employers should not assume that 24 months is a firm limit for reasonable notice periods. Employers should assess each case individually, considering all contextual elements that may be considered by courts in applying the <em>Bardal<\/em> factors.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">2. Importance of employment agreements<\/h3>\n\n\n\n<p><em>Lischuk<\/em> emphasizes the importance for employers to have unambiguous and enforceable employment contracts in place to effectively limit employee entitlements to notice upon termination. The outcome of this dispute may have been significantly altered if the Plaintiff had been subject to an employment agreement.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">3. Mitigation burden on employers<\/h3>\n\n\n\n<p>Employers cannot rely solely on an employee\u2019s inaction: they must provide evidence of actual comparable job opportunities to succeed on mitigation arguments. Only then can an employer successfully use the defence that the employee failed to mitigate their losses.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion<\/h2>\n\n\n\n<p>The <em>Lischuk<\/em> decision underscores that employers cannot assume a 24-month cap on reasonable notice in Alberta, nor can they rely solely on an employee\u2019s inaction to reduce damages. To limit their damages, employers should ensure that:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Termination provisions in employment agreements are unambiguous and enforceable;<\/li>\n\n\n\n<li>Termination decisions are supported by thorough documentation; and<\/li>\n\n\n\n<li>Evidence of comparable employment opportunities is gathered promptly when relying on a mitigation defence.<\/li>\n<\/ul>\n\n\n\n<p>Failing to address these points can significantly increase termination costs, as demonstrated by the $1.52 million award in this case.<\/p>\n\n\n\n<p>Our <a href=\"https:\/\/www.millerthomson.com\/en\/expertise\/labour-employment\/\">Labour and Employment team<\/a> works with employers across Alberta and Canada to draft enforceable agreements, assess termination risk, and defend against wrongful dismissal claims. If your organization is facing a potential termination or employment dispute, contact us to discuss proactive strategies to limit exposure and protect your business.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><a href=\"#_ftnref1\" id=\"_ftn1\">[1]<\/a> <em>Lischuk v K-Jay Electric Ltd<\/em>, 2025 ABKB 460<em> <\/em>at para 9.<\/p>\n\n\n\n<p><a href=\"#_ftnref2\" id=\"_ftn2\">[2]<\/a> <em>Ibid<\/em> at para 11.<\/p>\n\n\n\n<p><a href=\"#_ftnref3\" id=\"_ftn3\">[3]<\/a> <em>Ibid<\/em> at para 14.<\/p>\n\n\n\n<p><a href=\"#_ftnref4\" id=\"_ftn4\">[4]<\/a> <em>Ibid<\/em> at paras 15-16.<\/p>\n\n\n\n<p><a href=\"#_ftnref5\" id=\"_ftn5\">[5]<\/a> <em>Ibid <\/em>at paras 19-20.<\/p>\n\n\n\n<p><a href=\"#_ftnref6\" id=\"_ftn6\">[6]<\/a> <em>Matthews v. Ocean Nutrition Canada Ltd.,<\/em> 2020 SCC 26<em> <\/em>at para 55.<\/p>\n\n\n\n<p><a href=\"#_ftnref7\" id=\"_ftn7\">[7]<\/a> <em>Lischuk<\/em>, <em>supra<\/em> at para 62.<\/p>\n\n\n\n<p><a href=\"#_ftnref8\" id=\"_ftn8\">[8]<\/a> <em>Ibid<\/em>.<\/p>\n\n\n\n<p><a href=\"#_ftnref9\" id=\"_ftn9\">[9]<\/a> <em>Ibid<\/em> at paras 76, 94.<\/p>\n\n\n\n<p><a href=\"#_ftnref10\" id=\"_ftn10\">[10]<\/a> <em>Ibid<\/em> at paras 97-100.<\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>For the first time in Alberta, a court has awarded more than 24 months\u2019 reasonable notice in a wrongful dismissal case. In Lischuk v K-Jay Electric Ltd. (\u201cLischuk\u201d), the Alberta Court of King\u2019s Bench ordered an employer (the \u201cCompany\u201d) to pay an employee with 34 years of service, and significant minority shareholder (the \u201cPlaintiff\u201d), 26 [&hellip;]<\/p>\n","protected":false},"author":122,"featured_media":25872,"parent":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[542],"insight-format":[416],"class_list":["post-37307","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-labour-and-employment"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Wrongful dismissal in Alberta: Court awards more than 24 months\u2019 reasonable notice<\/title>\n<meta name=\"description\" content=\"For the first time in Alberta, a court has awarded more than 24 months\u2019 reasonable notice in a wrongful dismissal case. 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